IMF Praises India’s Growth Story While Pakistan Seeks Yet Another Loan

Last Updated:October 15, 2025, 10:53 IST

For India, the IMF has become a global amplifier of credibility. For Pakistan, it remains a lifeline of last resort.

While India’s story inspires confidence, Pakistan’s remains one of recurring financial dependence. (Image: Govt Of Pakistan, PMO India)

The International Monetary Fund (IMF) this week drew a stark contrast between India’s economic momentum and Pakistan’s continuing dependence on financial aid. As the Fund lauded India’s “resilient" growth and reform-driven stability, it confirmed a $1.2 billion staff-level agreement with Pakistan to keep its fragile economy afloat.

India: ‘A Beacon of Stability’

In its latest outlook, the IMF raised India’s growth forecast for 2025–26 to 6.6 per cent, praising its ability to “maintain strong momentum despite global headwinds." IMF Managing Director Kristalina Georgieva said, “India has proven many doubters wrong — it has demonstrated that bold reforms, digital innovation, and fiscal discipline can deliver inclusive growth."

The Fund highlighted that India’s growth is supported by robust domestic consumption and investment. “Resilient private demand continues to underpin India’s growth story," it said in its October report, noting that India remains the fastest-growing major economy in the world.

Georgieva added that India’s fiscal and digital initiatives, including the Aadhaar ecosystem and Unified Payments Interface (UPI), “serve as a model for emerging economies seeking inclusive modernisation."

Even as it warned of global trade tensions and tariff-related risks, the IMF said India’s macro fundamentals “remain sound," with inflation broadly contained and monetary policy “appropriately calibrated."

Pakistan Reaches Deal With IMF

While India’s story inspires confidence, Pakistan’s remains one of recurring financial dependence. On October 14, the IMF announced a staff-level agreement with Islamabad for a $1.2 billion payout, including $1 billion under the Extended Fund Facility and $200 million from the Resilience and Sustainability Facility.

The IMF noted: “Pakistan’s program aims to entrench macroeconomic stability and rebuild market confidence." But this marks yet another bailout in a long line of rescue packages — the 24th IMF engagement since independence, highlighting the country’s chronic fiscal fragility.

Despite modest improvements in inflation and external buffers, Pakistan continues to rely heavily on IMF funding to meet debt obligations, stabilise its currency, and reassure markets. The Fund reiterated that progress “depends on sustained reform momentum," including energy pricing, tax reform, and privatisation of loss-making state firms.

Analysts warn that Pakistan’s repeated return to the IMF has created a cycle of dependence, with each program offering temporary relief but limited structural change.

Diverging Paths, Shared Lessons

The contrast between India’s praised resilience and Pakistan’s recurring bailouts underscores a deeper divide. For India, the IMF has become a global amplifier of credibility. For Pakistan, it remains a lifeline of last resort — one that comes with conditionality and pressure for reform.

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The News Desk is a team of passionate editors and writers who break and analyse the most important events unfolding in India and abroad. From live updates to exclusive reports to in-depth explainers, the Desk d...

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